Mealey's Securities

  • May 14, 2021

    Magistrate Judge Recommends Grant Of Attorney Fee Awards In Securities Suit

    MIAMI — A federal magistrate judge in Florida on May 12 issued a report recommending that a beauty products company and others be awarded more than $58,000 in appellate and supplemental trial attorney fees in a securities class action, ruling that the defendants are entitled to such fees and that the amount requested is reasonable.

  • May 14, 2021

    Investor Claims Against Cannabis Company Dismissed On Scienter Grounds

    NEWARK, N.J. — A federal judge in New Jersey on May 6 ruled that although lead plaintiffs in a securities class action have sufficiently pleaded some actionable misrepresentations or omissions made by a Canadian cannabis distributor and several of its current and former executive officers regarding the company’s market expectations for its sale of recreational cannabis products, in pleading their federal securities law claims, the lead plaintiffs have failed to show that the defendants acted with a strong inference of scienter.

  • May 13, 2021

    Judge Grants Final Approval Of $640,000 Settlement In Securities Class Action

    NEW YORK — A federal judge in New York on May 12 granted final approval of a $640,000 securities class action settlement between shareholders and a technology company and certain of its senior executives stemming from the defendants’ alleged concealment of a man’s status as beneficial owner of shares in the company’s affiliates in violation of federal securities laws.

  • May 12, 2021

    Morrison Test Applicable In Summary Judgment Ruling Against Investment Brokers

    BOSTON — A federal district court did not err in applying federal securities laws to two investment brokers who the Securities and Exchange Commission alleged engaged in a scheme to solicit domestic and international investment in unregistered securities of a company that sold a machine that would clean and decontaminate mail, a First Circuit U.S. Court of Appeals panel ruled May 10, rejecting the appellants’ argument that the extraterritoriality test established by the U.S. Supreme Court in Morrison v. National Australia Bank, Ltd. did not allow for such a ruling.

  • May 12, 2021

    Investors’ Section 14(a) Claim In Shareholder Derivative Suit May Proceed

    COLUMBUS, Ohio — A federal judge in Ohio on May 11 denied a motion to dismiss filed by current and former executive officers and directors of energy provider FirstEnergy Corp. in a shareholder derivative lawsuit stemming from the defendants’ involvement in a massive bribery, racketeering and pay-to-play scheme with Ohio legislators, ruling that lead plaintiffs have sufficiently pleaded the necessary elements of their federal securities law claims.

  • May 12, 2021

    Investor:  Growth Rebates Not Reported In Medical Device Maker’s Financials

    NEW YORK — A medical device maker and two of its senior executives violated federal securities laws by misrepresenting to investors that the although company’s net sales had grown during the second quarter of 2020, certain undisclosed factors, including the use of growth rebates and other allowances, would prevent the growth to continue in subsequent quarters, an investor alleges in a securities class action complaint filed on May 7 in New York federal court.

  • May 10, 2021

    Judge: Investors Have Standing To Assert Section 11 Claim Against Auditor

    KNOXVILLE, Tenn. — A federal judge in Tennessee on May 7 substantially denied KPMG LLP’s motion to dismiss shareholder class claims alleging that the auditor assisted an oil and gas exploration company in defrauding investors of millions of dollars based on allegedly overly inflated valuations of Alaskan oil and gas assets the company owned, ruling that the shareholder’s claim brought pursuant to Section 11 of the Securities Act of 1933 was not barred under the statute of repose and because the shareholders had standing to bring the claim.

  • May 07, 2021

    Securities Suit Against Construction Company Hangs On By Slim Margin

    DALLAS — A federal judge in Texas on May 5 ruled that although lead plaintiffs in a securities class action lawsuit against a provider of design, engineering, procurement and construction services in a variety of industries and others have cured some of their pleading deficiencies that led to the dismissal of their prior complaint, they have still failed to plead the necessary elements of their federal securities law claims with regard to all but one of alleged misstatements.

  • May 06, 2021

    Investor Sues Stock Promoters, Others Over Sale Of Unregistered Securities

    FORT LAUDERDALE, Fla. — An investor sued four individuals and three alleged sham companies for which the individuals acted as promoter, director and/or officer in Florida federal court on May 3, alleging that the defendants engaged in a scheme to sell unregistered securities and solicit investments in the companies in violation of federal securities law and Florida statutes.

  • May 04, 2021

    COVID Vaccine Contractor Emergent BioSolutions Faces House Probe, FDA Report, Suit

    Over a two-day period April 19 and 20, COVID-19 vaccine contractor Emergent BioSolutions Inc. became the subject of a House investigation, a critical Food and Drug Administration inspection report of a vaccine production facility and a shareholder lawsuit.

  • May 05, 2021

    Cisco Seeks Dismissal Of Shareholder Derivative Claims In Board Diversity Suit

    OAKLAND, Calif. — Technology company Cisco Systems Inc. on April 30 asked a federal judge in California to dismiss shareholder derivative claims against its CEO and board of directors over the lack of African Americans in the company’s senior leadership roles because the board’s decision not to pursue litigation was not wrongful and is entitled to deference under the business judgment rule.

  • May 03, 2021

    Former CRA Seeks Dismissal Of Securities Claims In Enforcement Action

    NEW YORK — A former credit rating agency (CRA) asked a federal judge in New York on April 16 to dismiss federal securities law claims brought against it by the Securities and Exchange Commission, arguing that the SEC’s allegations regarding the CRA’s methodology used to rate commercial mortgage-backed securities (CMBS) and the CRA’s alleged lack of adequate internal controls are not sufficient to state a claim for relief.

  • April 30, 2021

    Investor Claims In Groupon Stock-Drop Suit Dismissed As Puzzle Pleading

    CHICAGO — A federal judge in Illinois on April 28 granted a motion to dismiss filed by e-commerce marketplace Groupon Inc. and certain of its former senior executives, ruling that the allegations supporting the lead plaintiff’s federal securities law claims do not meet the strict pleading requirement of the Private Securities Litigation Reform Act (PSLRA).

  • April 29, 2021

    Gap Board Diversity Suit Dismissed Based On Forum-Selection Clause

    SAN FRANCISCO — A federal magistrate judge in California in an April 27 order ruled that dismissal of a shareholder derivative lawsuit against several current and former executive officers and directors of The Gap Inc. over the company’s lack of racial and ethnic diversity on its board of directors and senior management team is warranted because a forum-selection clause included in the apparel company’s bylaws requires that the plaintiff’s action be heard in the Delaware Court of Chancery.

  • April 29, 2021

    Jewelry Wholesaler Agrees To SEC Consent Order In Nearly $70M Ponzi-Like Scheme

    BROOKLYN N.Y. — A federal judge in New York on April 20 entered a consent judgment in a Securities and Exchange Commission lawsuit against a jewelry wholesaler who operated a “Ponzi-like” scheme, which defrauded at least 80 investors of at least $69.5 million and misappropriated investor funds in violation of federal securities laws.

  • April 28, 2021

    Addition Of Witness Allegations Allows Securities Claims To Survive Dismissal

    CHICAGO — A lead plaintiff’s addition of confidential witness allegations in this third amended complaint have cured the pleading deficiencies that led to the dismissal of an earlier-filed amended complaint in a securities class action against a provider of in-flight internet connectivity equipment and services to airlines and airline passengers and certain of its current and former senior executives over the defendants’ alleged failure to disclose significant design flaws with one of the company’s global satellite system products in violation of federal securities laws, a federal judge in Illinois ruled in denying a motion to dismiss on April 26.

  • April 27, 2021

    TD Ameritrade Client Class Certification Overturned On Predominance Issues

    ST. LOUIS — A federal judge in Nebraska abused his discretion in certifying a class of TD Ameritrade Holding Corp. clients in a securities fraud action against the online trader and its subsidiary and CEO because an algorithm the lead plaintiff’s expert contended could be used to determine the economic loss for each class member would not meet the predominance requirement of Federal Rule of Civil Procedure 23(b)(3), an Eighth Circuit U.S. Court of Appeals panel ruled April 23 in reversing and remanding for further proceedings.

  • April 26, 2021

    Fraudster’s Conviction For Role In Pump-And-Dump Scheme Upheld On Appeal

    ATLANTA — An 11th Circuit U.S. Court of Appeals panel on April 22 affirmed the conviction of a securities law attorney on charges that he and co-conspirators engaged in a seven-year securities fraud and pump-and-dump scheme that involved the creation of about 20 fraudulent companies.

  • April 26, 2021

    Investor Claims In Stock-Drop Suit Over Alleged Exelon Bribery Scheme Pass Muster

    CHICAGO — A federal judge in Illinois on April 21 allowed a shareholder class action lawsuit alleging that energy provider Exelon Corp., its subsidiary and several of their current and former executive officers violated federal securities laws by concealing their involvement in a bribery scheme to proceed, ruling that the lead plaintiff sufficiently pleaded an actionable misstatement or omission and scienter in making its securities law claims.

  • April 23, 2021

    Trimmed-Down Section 10(b) Claims Survive Dismissal Bid In Stock-Drop Suit

    NEWARK, N.J. — A federal judge in New Jersey on April 20 partially granted a motion to dismiss filed by defendants in a securities class action lawsuit against an Indian film company and certain of its current and former senior executives, ruling that lead plaintiffs have sufficiently pleaded their federal securities law claims, albeit to a lesser extent than they had alleged in their amended complaint.